Archive for the ‘Media Management’ Category

Successful Mergers in the Media Industry

January 26, 2010

The crisis is fostering consolidations in the media industry. Operations of concentration help to reduce costs and allow to better face the increasing number of competitors. But, according to most analists, more than 70% of mergers do not add value for shareholders.

We provide some suggestions for developping successful mergers and acquisitions:

– Prepare a good analysis. Be a bit sceptical about the synergies that you will create.

– Forget the “big words” -credibility, diversification of risks, internationalization…- and look at the real data: income, costs, debt, profit margins.

– Write the plan for “the day after”: tasks, deadlines, people in charge of each goal…

– Look at the intangible benefits you will get: new knowledge and new competences, more talent and creativity, more valuable brands…

– Do not overestimate the benefits of size and economies of scale. Do not forget the risks of burocracy and lack of focus.

– Try to armonize the two organizations’ cultures fostering internal dialogue.

– Pay attention to the little details of implementation.

Could the Crisis be an Oportunity for Media Groups?

December 1, 2009

Media groups all over the world are feeling the pinch. Almost everything is going down: advertising incomes, profits, share’s prices, circulation figures, size of staffs, managers’ expectations…

In periods of prosperity it is not easy to discover companies’ failures because profits usualy hide managers’ mistakes. But now the crisis has helped us to identify some strategic errors: most part of media groups have been short term oriented, have take to much financial risk, have been obsessed with maximizing profits and increasing size, have had weak editorial projects, and have not paid enough dedication to motivate their teams.

The crisis remind us that good management requires strong leadership, a culture of innovation, balance between short term focus and long term goals, a highly motivated team, good understanding of new technologies, the ability to protect brands’ value and a coherent editorial project.

Companies can not avoid the crisis -which is deep, long and almost universal- but at least can learn from it.

20 Minutos and Metro join forces

November 25, 2009

The economic crisis is forcing free dailies to become partners. Metro International and 20 Minutos closed a deal wherebythe Swedish Company will manage the international advertising of SchibstedSpanish free daily.

The agreement means that every advertising campaign managed byMetro in the world could include Spain as a country and 20 Minutos as a medium. Until now, international campaigns had very little representation in the Spanish paper.

During the third quarter of 2009, the advertising income of 20 Minutos shrunk 12.5%. These figures complicate the future of Schibsted in Spain. Even though the free daily reduced costs dramatically, including staff, the effects are still not evident.

Schibsted and Metro International maintain good relations since May 2008,  when Metro divested 35 percent of MetroSweden to Schibsted, who then decided to close their title Punkt.se.

The deal with Metro will not only support advertising incomes of the Spanish free daily, but will also allow it to trade with important European brands. The same agreement was signed by Metro UK (Associated Newspapers), so Global Sales of Metro International will negotiate the international advertising packages of both publications. This is one of the strategies free dailies are implementing to fight the crisis.

52% would pay for online contents

November 19, 2009

Yesterday I asked some students if they would be disposed to pay for online contents. They said “no”. But today I read that a Boston Consulting Group research affirms that, in Spain, 52% of Internet users would pay for those contents.

Rupert Murdoch, who is convinced that the future of Internet depends on charging for the contents, is gaining more and more supporters. London Times already charges for their contents in its portal and many other editors are planning to do the same.

Boston Consulting Group has studied nine countries and in every one of them the results have been positive in favor of paying. The nature of the contents for which people would pay is especially local, although in EE.UU and U.K. Internet users prefer to pay for the breaking news service.

However, Boston Consulting Group research explains that even though a lot of people would give money for those contents, they are not disposed to pay a lot. In Spain, people would pay four Euros per month for “premium contents” on Internet, and only 11.3% of the Internet users would reach to ten Euros for them.

One of the walls that difficult the operations is that people do not like online transactions through credit card, because they have to give some bank details.

The role of the contents producers

November 2, 2009

Mercedes Medina.

I would like to share some comments with you. There are many changes that affect the media and are transforming them. I´ve heard this morning in a Conference in Neuchatel, Switzerland, about Media Interactivity: Economic and Managerial Issues, that the revenue from interactive services of the television channels, Mediaset and BSkyB, has grown in the last years. On the other hand, users of media are now dialoguers, debaters, messengers, testers and content producers. Furthermore, in El País, October 28, there was a report about the DTT where was said that the future of television goes through the interactive services such as income tax statement, taxes payment, medical services, shopping, that overcome the digital divide of households without Internet access.

With all these changes, media companies are not any more companies that only deliver contents. Media managers have to set departments of marketing, retailing, and stores, or to signed agreements with external firms. So, in this new context what is the role of the content producers? How do they have to produce or create media goods? What is going to be the core business of media companies? Will be still important to have good contents that satisfied the information and entertaining needs of the audience?

Online charging helps quality

October 9, 2009

Charging fees for online content has been one of the most interesting debates for the last few years. The problem of how to make money through the Internet has taken publishers to consider the possibility of charging fees for their online content.

Companies that want to be profitable on the Internet currently need to atract millions of visitors because it is the only way to get good advertising contracts. However, many enterprises are anticipating a change of paradigm and rethinking their business model and planning a shift to getting money directly from the visitors, through micropayments or subscription (http://www.mediaweek.co.uk/news/944161/Online-charging-work-AOP-delegates-told/).

Charging for content would have a very positive impact on media industry because it would force the journalists and people who work producing and delivering information to make better products. When one competes against a company which distributes free information it becomes imperative to make an effort to differentiate one’s product and convince the public that it is worth paying for higher quality content.

Is there any light at the end of the tunnel?

April 1, 2009

PRISA has been the biggest and most prestigious media company in Spain. It was the first to be quoted in the stock exchange: in 2000 their shares had a value of 27 euros. Now their value is below 2 euros. 

If we look at the other Spanish main media groups, the news are not more encouraging:  Unidad Editorial  had lost 11 millions euros in 2008; Planeta has a big debt; and Vocento is firing employees in ordet to cut costs.

Spanish media companies are feeling the pinch, but … can we consider that those problems are just the effect of the crisis?

It seems to me that the financial and advertising crisis  have put some light to the real problems of media companies: lack of leadership; weak innovative spirit; highly unmotivated workforces; focus on short-term results.

Media managers can learn an interesting lesson from the crisis: the future of media depends on their ability to i) understand and match consumers’ expectations, ii) improve the products and services’ quality iii) protect the value of their brands, and iv) create great teams.

The Spanish media industry´s demands

March 2, 2009

 

The current economic crisis is banging strongly the mass media all over the world. Media companies are now reacting against what seems to be one of the biggest waves that can sweep them away in its path.

In Spain the main media companies have asked the Government for measures which help their battered economy. Radios with digital license (SER, Cope, Onda Cero, RNE, etc.) want to stop their broadcasting through this technology: public and private operators have to pay 30 million euros to put the digital signal into the air. This would not be a problem if the programmes were listened to someone. But, as most of the people do not have receivers with such a technology, they are unable to do it and so these programmes lack a very needed audience.

On the other hand, private television channels complain against the broadcasting of advertisement by public television channels. Furthermore, they claim a control of the costs for the sports and movies broadcasting rights: they now pay a lot of money for the Champions League or the Motorcycle World Championship. Besides this, they want to abolish the obligation to assign the 5% of their income to the Spanish movie industry.

Also the daily newspapers have appeared with their claims and they ask the Government for the removal of the value added tax for press so that the reading among the youth can be promoted.

Government should always support media industry. Now it has to intensify its attentions because of the crisis. But this does not mean that the media companies can forget their responsibilities. They are in a very competitive market that demands to make a great effort in order to get reliability, quality contents, extreme care of the audience, etc. Many of the competitors have forgotten it and they now are asking the Government for a solution that they should find inside.